eitesal 4g technology impact
TRANSCRIPT
What will 4G mean for Egypt?
Paul BlackDirector, Telecoms, Media& IoT
IDC META
2
Mobile Data is growing fast!
Source: IDC MEA TSDB 2016
Egypt Mobile Connections 2015-2020 (000)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2015 2016 2017 2018 2019 2020
Mobile Voice Connections Mobile Data Connections
23%
-5%
3
3G will be dominant access type in the short term, but 4G LTE will grow the fastest
Source: IDC MEA TSDB 2016
Egypt Connections Type 2015-2020 (000)
• GSM will continue to decline at CAGR -18% as subscribers migrate to 3G and 4G networks
• Post 2018, as 4G enabled smartphones become more readily available, 3G substitution by 4G will accelerate
• In the short term, 3G will be the dominant broadband access type driven by increasing penetration of smartphones
• Post 2020, 2G relevance will diminish rapidly, making a strong case for 2G shutdown e.g. Telstra Australia has shut down 2G network in December 2016
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2015 2016 2017 2018 2019 2020
GSM 3G Total 4G LTE Broadband Dedicated Dial
4
Just like in UAE, smartphones will quickly overtake feature phones
Source: IDC
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2013 2014 2015 2016 2017 2018 2019 2020
Feature Phone Smartphone
Egypt Device Penetration 2015-2020 UAE Device Penetration 2015-2020
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2013 2014 2015 2016 2017 2018 2019 2020
Feature Phone Smartphone
5
Cost of smartphones will decline in US$ terms, but will be increasing in local currency
Source: IDC 2016 Q3 Forecast
Egypt Smartphone Prices Forecast 2015-2020 (US$)
$ 0
$ 50
$ 100
$ 150
$ 200
$ 250
2015 2016 2017 2018 2019 2020
Smartphone Prices
• Prices in US$ terms will continue to decline, but will increase in EGP by over 15% due to exchange rate
• Launch of mobile manufacturing plant may contribute to making affordable smartphones more available
• Grey market will continue to decline due to scarcity of foreign exchange
• Most of the distribution will continue to be dominated by Independent Retail (IR), who control 75% of the market
6
Egypt is the only major market In Africa & Middle East without 4G LTE
Source: IDC
Less than 20%
Between 20% and 50%
Between 50% and 80%
More than 80%
Coverage Indicators (% of the Population
“4G is a collection of wireless technologies able to support data rates of 100Mbps to 1Gbps. LTE is a 4G mobile technology”
7
Today’s applications need 4G LTE!
1984 2020
High
LowTODAY
5G
4G - LTE
3G
2.5G
2G
1G
Analog Voice
Cap
acit
y
20021991 1999 2010
Digital Voice, SMS
Packetized Data. MMS
Broadband Data
Completely IP, Multimedia
Multimedia, IoT
8
4G is a major enabler of the digital economy
4G provides a big boost to data traffic, most of that is video
Better support for M-commerce and multimedia services
Support enterprise mobility and workforce flexibility
Enables IoT applications such as Telemedicine & surveillance
Accelerates Telecom, IT & media integration
9
What is LTE for? End User vs Operator Perspective
Fast browsing, downloading & uploading
Mobile video streaming
Real-time IP communications
Online gaming & Tethering Wi-Fi devices
Home broadband in under-served locations
Faster data rates, with lower latency: 10Mbit/s+
Higher capacity: More bits per Hertz than 3G/HSPA
New and better utilized spectrum
All-IP mobile networks paving way for FMC
Global interoperability - 3GPP/3GPP2 both adopt LTE for next-gen
Enterprise applications, e.g. Surveillance, distance learning etc.
End User Perspective Operator Perspective
10
4G will accelerate Telco Transformation & enable new revenue streams
Enhance data offering – With LTE, service providers are able to provide competitive data services and increase contribution of data to total revenue
Enables Telco & IT Convergence – better capacity enables Telcos to provide basic IT services such as public cloud services e.g. Office 365, storage, etc. providing additional revenue
Competitive SME proposition – Fixed LTE data services targeted at SMEs enables mobile operators to compete with Fixed services such as Fttx with compelling proposition
Enterprise mobility services – better 4G capacity drives adoption of Enterprise mobility solutions especially in public, Finance, health and other verticals
Prevent further ARPU Decline – LTE data services helps Telcos improve service bundling offerings which helps to slow down ARPU decline especially in consumer segment
Digital Services – Better capacity provide opportunity for Telcos to provide digital services such as digital music streaming, IoT services – surveillance & connected homes
Enable Telco & Media integration – LTE enables mobile providers to provide digital media services especially in the consumer segment enabling new revenue streams
Services Bundling – LTE enables providers to offer competitive bundles especially in the consumer segment at flat rates and reduce effect of OTTs
11
4G LTE in other countries - MEA: Rapid growth in GCC
Source: IDC (2012). GCC = Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE; Other MEA = Algeria, Egypt, Jordan, Morocco, Tunisia
Egypt LTE Connections as % mobile connections 2011-2016
0%
2%
4%
6%
8%
10%
12%
14%
16%
2011 2012 2013 2014 2015 2016
LTE
Co
nn
ect
ion
s as
% o
f M
ob
ile C
on
nec
tio
ns
GCC Turkey South Africa Kenya/Nigeria Other MEA
12
4G LTE in other countries – South Africa
Source: IDC
Telkom Mobile – South Africa
Smallest of all mobile operators in South with 60MHz of LTE spectrum in 2.3GHz band
Provides popular fixed LTE and LTE-A services for consumer & mostly SMEs
Launched innovative fixed rate data centric bundles with voice as added service called FreeMe bundles which have proved to be very successful in the market with uptake of 170k in 2 months since launch
Partnered with Multichoice, a media company, to bundle premium VoD (ShowMax) service on both fixed and fixed LTE bundles
Plan to re-farm half of 1800MHz spectrum for LTE to improve coverage especially in metro areas
Betting big on data as a strong growth area especially in SME and consumer segments with bundles that include free access to OTTs
MTN – South Africa
Second largest mobile operator in South Africa, and 2nd to launch LTE services
Re-farms existing 1800MHz spectrum to provide LTE in metro areas as it awaits public auctioning of LTE spectrum by ICASA
Provides directed LTE-A services in Affluent areas and normal LTE services in other metro areas
Responded to Telkom Mobile’s aggressive data offering with own MyChoice data bundles that offer double the amount of data at same price
Zero rates data for its VoD services - MTN Vu - for MTN customers
Betting big on digital services with connected homes and plans to introduce competitive data bundles on fixed LTE services and Fttx
MTN Digital specially looking at lifestyle & entertainment, connected home digital services for consumer segment
13
4G LTE in other countries – Kenya & Saudi Arabia
Source: [IDC Enterprise & Service Provider Survey 2016], n = 161 (all enterprises) and 10 (all SPs)
Safaricom – Kenya
Dominant mobile provider in Kenya with LTE license at the moment
Invested in marketing campaign promoting LTE data services and customer awareness
Launched first in affluent areas in Nairobi and are in the process of expanding to other key towns
Promote low cost LTE enabled devices and also launched a LTE sim swap program to promote LTE uptake
Introduced 4G data bundles at same price as 3G but offering double the amount of data
Soft relaunched its digital VoD service, BigBox, in partnership with ShowMax from Multichoice for a better value proposition
Operators in Saudi Arabia
All operators in Saudi, STC, Zain & Mobily, have 4G LTE services launched in 2011
Invested in pre and post launch market awareness campaign to promote benefits of LTE services
Have since experienced strong consumer internet penetration as fixed LTE services become popular with consumer and SME segments
Introduced 4G LTE is metro areas in Riyadh and expanded to other key towns
4G LTE is mainly promoted a providing more capacity and enhancing user experience
No specific bundling with digital media content
Promotion and bundling of 4G enabled devices to drive usage
14
Towards 5G – Not standard yet, but we know the usecases
Source: [IDC Enterprise & Service Provider Survey 2016], n = 161 (all enterprises) and 10 (all SPs)
Mass Market Personalized TV with big data analytics improving the video experience
Support interactive multimedia, voice, streaming video & high HD TV
5G 3GPP
Approved
Broad Use-
cases
Enhanced mobile broadband1
Massive machine-type
communications - IoT2
Ultra-reliable and low-latency
communications3
Higher speeds and capacity, data in Gbps
Network virtualization, agile and flexible – network as a service to suit each usecase
Massive IoT & autonomous driving
Critical Machine Type Communication with remote operation
5G commercial deployments are expected by 2020. We don't know exactly what 5G is yet. But we've reached the point where weknow enough about 5G to see what it will not be, and to get greater clarity about what it is likely to be.
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Drivers of demand: end user trends - Ubiquity: “Anything, Anyone,
Anywhere, Anytime”
Source: [IDC Enterprise & Service Provider Survey 2016], n = 161 (all enterprises) and 10 (all SPs)
Mass market
mobile multimedia
Enterprise
IT mobility & cloud
Both
IoT & m2m
